A cynical commentary about developments in the South African financial markets and the incomprehensible activities and pronouncements of bureaucrats and politicians.

Friday, 26 September 2014

A VERY UNIMPORTANT COMMENT

It’s not just our own poor little runt
that is taking a hit. There is a global shift into the US currency. Everyone’s money is
losing ground to the US dollar.The
reason for this flight is uncertain. It could even be a sign of approval that
the USA is now showing a bit
of military might in the Middle East and humanitarian sympathy in West Africa. Adding to our own woes, there is a sprightly
and toothy bear at large in the JSE. The average fall this week among the top
20 is almost 5% and this includes horrors like -17% by Kumba, the iron ore miner.
Reports of a slowdown in China
are being cited as a reason since this would cause a decreased demand for all
the minerals that we dig out of the ground to sell to them. All that is really
known is that sellers of many shares are starting to queue up and the only way
to get to the head of that particular line is to offer a lower price than the
current front runner. When that idea catches on we will see a real bear market
develop.

Aside from all the usual questions about
why so many officials including the president needed to be in New York for yet another pointless talk-fest,
the interesting thing to emerge from the furore about the private jet was that
it revealed the existence of a sort of Treats Handbook when it comes to flying
in chartered aircraft. It seems that there is a caste system for important people,
who are classified from being very very, through merely very, down to not very
at all. In addition to four suitcases and five coat bags, each VVIP may take
10kg of carry-on luggage, which somewhat explains the need for a muscled
bodyguard among the 14 permitted passengers. The boss man gets a private
bedroom and en-suite bathroom with a shower on board the plane. Somehow this is
not surprising. Everyone on board can expect 4.5kg of food and drink per meal
which may not be all that generous after adding the weight of a couple of
bottles of Johnny Blue.

Nevertheless all these details merely
confirm that we have an obscenely self-important self-indulgent and nearly self-appointed
troop of leaders who are rewarding themselves with levels of comfort which
greatly exceed the value they provide to their paymasters. A perfect example of
this swept the story about the chartered jet into the inside pages when it
emerged that the country had been entered into a deal with the Russians for
something to do with nuclear power stations. Scant details offered by one side
were quickly denied by the other and now the whole affair has been draped with
a cloak of secrecy. This immediately confirms that right at the heart of the
“deal” there is a price which is egregiously wrong. That almost certainly points
to money that will flow in unusual directions. A deeply ironic twist to this
tale is that the arrangement which probably involves rands counted in trillions
and watts measured in gigas was likely negotiated by a man who battles with
numbers that comprise more than about five digits and by a woman who is delightfully
unencumbered with any technical training or experience whatsoever. Some
commentators are already drawing comparisons with the notorious and still
opaque arms deal of almost 20 years ago.

A similar total refusal to reveal the
truth concerns the small but heavily used Virginia Airport
here in Durban North. Allegedly it is to be closed and moved. Where to? There
is still only one runway at the huge new King Shaka facility north of the city.
Undoubtedly someone high up in the
municipal structure has plans for an alternative use for the land and the secrecy
indicates once again prices will be rigged and money will vanish.

I have only one flagpole and so just
before the nerve-racking encounter with the Wallabies tomorrow I shall have a small
ceremony to replace the Sharks flag with the ‘bok banner. Once again I am advised
not to watch either and so will merely track the scores on Twitter in a quiet
room.